Sweetening the beverage market - naturally

March 31, 2009
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by Allison Sebolt

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With the introductions of SoBe LifeWater and Sprite Green, PepsiCo, Inc. and The Coca-Cola Co. moved quickly to use stevia in their beverages as soon as the Food and Drug Administration confirmed the sweetener to be Generally Recognized as Safe this past December.

"Stevia is supposed to offer a non-dangerous natural alternative to sugar, high-fructose corn syrup and artificial sweeteners, and that’s why it’s supposed to do well," said Marcia Mogelonsky, senior research analyst with Mintel International, Chicago. "It doesn’t have the calorie punch of sugar; it doesn’t have the bad image of HFCS."

For All Sport, Inc., Austin, Texas, and Dr Pepper Snapple Group, Inc., Plano, Texas, the sweetener is a way of providing hydration benefits without the calories. In fact, the companies have jointly introduced All Sport Naturally Zero, a sports drink being marketed with a motto of "all the hydration without the calories, naturally."

"If you talk to anybody engaged in exercise and fitness, I think they will tell you they love and need to be hydrated," said Jack Pok, senior vice-president of marketing with Big Red, Inc., which owns All Sport. "They certainly like products that taste good, but I think they would also tell you they would prefer to limit or reduce the amount of calorie and sugar intake and avoid chemicals."

Mr. Pok said the product has a target audience of both men and women ages 18 to 34 who are interested in health, wellness and sports. He noted, though, that the product may be slightly more attractive to females.

"We have been working diligently in our R.&D. center to incorporate stevia in our products and in our allied brands such as All Sport," said Larry Young, chief executive officer of Dr Pepper Snapple Group. "Taste is king in the beverage industry, but for today’s consumers, healthy is becoming increasingly important. All Sport Naturally Zero delivers a unique proposition for the millions of Americans who exercise regularly and are looking to get the most out of their workouts."

Mr. Pok predicted sharp growth in the market for lower-calorie sports drinks as other brands in the market such as Gatorade G2 and PowerAde Zero have experienced large growth. But there may be a limit to what products stevia will be used in.

Mr. Pok said there are no plans for his company to reformulate Big Red with stevia. Big Red is already a sweet product and changing it may be contrary to the brand, he said. In terms of introducing new products with stevia, he said the company will have to take a hard look with how things go with the current initiative with All Sport.

According to Mintel, other beverages incorporating stevia include Sparka Sparkling Natural Drink and C’Tea Tea.

Ms. Mogelonsky said natural beverage products are of interest as consumers in the better-for-you beverage market have moved to beverages that are either functional in nature or those beverages making natural or organic claims. In fact, Mintel said 8 of the 10 top natural food and beverages products are beverages. Ms. Mogelonsky said artificial colorings and artificial ingredients are ingredients consumers want to avoid.

In terms of products that have been introduced with stevia, Ms. Mogelonsky said there has not been anything off-the charts exciting yet, but that doesn’t mean stevia isn’t filling a market need.

"It’s the very fact all of these things have stevia in them that makes you want to try them," Ms. Mogelonsky said. "I don’t think they have to come out with a super-beverage. The fact they can take the sugar or artificial sweeteners out of any beverage … and reformat them so they are now sugar, high-fructose corn syrup and artificial-sweetener free … that’s the bigger attraction."

Ms. Mogelonsky said the biggest challenge for companies using stevia is to make sure there is no aftertaste or competing taste and that it serves as a 100% replacement.

"I don’t think consumers need a lot of education about (stevia)," Ms. Mogelonsky said. "I think consumers will be happy to try it as long as there is no implied danger that they will buy it and not like it."

While she doesn’t think consumers in general need much education in order to initially try stevia, she said when considering childhood obesity it may be beneficial to educate parents more as to why it might be a better alternative for their children.

According to Mintel International, there were 30 beverage products launched in the United States with the sweetener in 2008, and there were 85 launched globally. In terms of both food and beverage products, there were 309 products launched globally with the sweetener in 2008, and there were 36 launched in the United States.

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